Overdraft and Loan Debts in Northern Ireland

Most people in Northern Ireland will have either some sort of Overdraft Facility in their Bank accounts or will have taken a loan out from either a bank or credit lending company.

How does an Overdraft Work?

You can apply for an overdraft from your bank. An Overdraft is when your bank lets you be drawn over so you are using account in the minus e.g. - £1000 or £1000 DR (Drawn Over). When you apply for an overdraft your bank will assess your financial situation and if they decide they can offer you an overdraft. They can charge you a fee for setting up the facility and in some cases they will apply monthly interest rates. Some overdrafts can be set up for free and are interest free; this is depending on your individual bank. Other banks can charge fees every month and interest on the money you are drawn over on. It is important to know all the details of what fees and charges apply to your overdraft before you agree to the overdraft.

Interest on Overdrafts

Once your overdraft is approved your bank will set you a limit that you are allowed to use in your overdraft. There may or not be fees for setting up the overdraft, however if you use more than the overdraft limit set by your bank they can charge you interest on the overdraft. For example if they set you an interest rate of 20% you will be paying 20% interest on the agreed loan amount for every month that you use it.

Overdraft Penalties and Charges

There also are the overdraft and penalty charges on overdrafts. For example if your overdraft limit is £1000 and it ends up being overdrawn by an extra £1 to £1001, they will then charge you a penalty fee for exceeding your limit. Let’s say the penalty is £20, this will then bring your overdraft limit up to £1021. The 20% interest will then be charged on the £1021 instead of the £1000. The banks can then also charge a monthly penalty fee for every month your overdraft is exceeding your agreed limit, and you will then be paying interest on top of that. So you can see how overdraft fees and charges can very quickly add up and spiral out of control.

Overdraft debt is common in Northern Ireland. Debt Advice Northern Ireland offer debt advice on overdraft debt, so no matter how much debt you have contact us now and begin the process of getting rid of your debt. Loans Most people in Northern Ireland will need to take out a loan at some stage of their life, either to buy a house, buy a car, get married, go on holiday, pay of debts, or set up a business. Unless you are lucky to have a lot of savings most people wouldn't have such a large amount of money to just go out and pay for such big items so they would take out a loan instead. The other main type of loan is a student loan which students take out to help them through their college and university education.

Since a loan is borrowed money, the bank or money lender will be adding interest on your borrowings so you need to be careful when choosing who you take a loan out with as you want to be paying back the least percentage of interest possible. Most debt problems with loans begin when people struggle to make the monthly repayments on the loan. This can happen for many reasons, like loosing your job, having too many things to pay out in a month, or just missing a few payments and then have the interest and charges spiral out of control to the point where you cannot afford to make the minimum payments anymore. This then leads to amount you owe back increasing more and more and people then struggle to keep up with the repayments and therefore end up with a lot of debt they can't manage.

Take control of your debts now

Unless you take some action against your debt problem it will only get worse. If you are already struggling then you should be making plans now to solve your debt problems. If you are in debt and are reading this now call Debt Advice Northern Ireland now on free phone 0800 043 0550 and let our debt advisors help you. Even you think the debt is too high and are considering Bankruptcy please talk to us first as there is other debt solutions out there that we can help you with.

Contact Debt Advice Northern Ireland for Free Debt Help and Advice

Get in touch with Debt Advice Northern Ireland now and we will be able to help you with your debt problems and advise you on what Debt Solutions are available to you. All our advice is FREE so you are under no obligation by giving us a call. Call us now on 0800 043 0550 or visit our Contact Page to see the various ways to get in touch with us. Alternatively you can Chat Online to one of our Debt Advisors now or take our Debt Calculator to figure out how much of your debt you could be paying back.